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HomeMy WebLinkAboutCity Council Committees - Operations Committee - 09/19/2017Operations Committee Minutes Approved October 3, 2017 Page 1 of 3 Date: September 19, 2017 Time: 4:00 p.m. Place: Chambers East Attending: Bill Boyce, Les Thomas and Dana Ralph, Chair Agenda: 1. Call to Order. 2. Roll Call. 3. Changes to the Agenda. Item #11 Non-Represented Salary Survey – Information Only was added for continued discussion from the September 5 meeting. 4. Approval of Check Summary Reports dated 8/16/2017 thru 8/31/2017. L. Thomas moved to approve the check summary report dated 8/16/2017 thru 8/31/2017. B. Boyce seconded the motion, which passed 3-0. 5. Approval of Meeting Minutes dated September 5, 2017. B. Boyce moved to approve the Operations Committee meeting minutes dated September 5, 2017. L. Thomas seconded the motion, which passed 3-0. 6. Ordinance approving the indirect change of control of Astound Broadband, LLC d/b/a Wave Franchise – Recommend. Civil Attorney Christina Schuck asked members to move forward an indirect change of control ordinance. The indirect change of control is a result of Radiate Holdco, LLC (Radiate) entering into an agreement to acquire all of the outstanding membership interests of Wave Holdco, LLC (Wave), which is the parent company of Astound Broadband, LLC (Astound). The agreement is to operate a telecommunications system within the City. The original Ordinance No. 4144 went into effect April 2015 granting a nonexclusive telecommunications franchise to Astound. On May 18, 2017, Radiate entered into an agreement to acquire all outstanding membership of Wave, the parent company of Astound. L. Thomas moved to recommend Council adopt an Ordinance approving the resulting indirect change of control of the Astound Broadband, LLC d/b/a Wave franchise with conditions and establishing an effective date, subject to final approval by the city attorney. B. Boyce seconded the motion, which passed 3-0. Operations Committee Minutes Approved October 3, 2017 Page 2 of 3 7. Internal Financing – Phase 1 LID 363 Project – Recommend. Finance Director Aaron BeMiller brought forward a request to approve an internal loan of $3,200,000 to finance Public Works’ phase 1 of the LID 363 224th Street project. If approved by full Council, the loan will come from the Sewerage Operating Fund and will be paid back in installments of $350,306.58 over a period of ten years. The annual interest rate is to be the higher of 1.68 percent or the annualized interest rate earned on the investments in the Local Government Investment Pool. The loan request was initially presented at the September 11 Public Works Committee meeting as an information only item. B. Boyce moved to recommend Council adopt an ordinance approving the internal financing for Phase 1 of the LID 363 Project in an amount not to exceed $3,200,000. L. Thomas seconded the motion, which passed 3-0. 8. City of Kent Fund Balance Policy – Information Only. Mr. BeMiller provided members with the newly updated fund balance policy. In 2012, through Resolution 1859, councilmembers established and approved the financial policies which included fund balance policy language for several funds, including the general fund. Over the past year, finance staff has been working on updating the established 2012 fund balance policy by using the Government Finance Officers Association best practices, which includes periodic review to address areas in need of modification/clarification. The new fund balance policy establishes fund balance levels for city funds for the purpose of addressing unanticipated and non-recurring operational needs. The policy addresses the appropriate uses of fund balance, the need for repayment plans should fund balance fall below the minimum level, and the need for long-term financial planning in the event of operational restructuring necessitating the use of fund balances. The policy also sets the activities for which fund balance levels above the minimum balance at the end of the fiscal year may be used. 9. July Financial Report – Information Only. Mr. BeMiller reported an overall positive budget variance of $2.7 million. The 2017 budget reflects an expected use of $2.4 million of fund balance, including $2 million for Parks capital projects. The budgeted use of fund balance is offset by the positive budget variance of $2.7 million, creating a net surplus of $305,000. General Fund Reserves are estimated to end the year at $17.9 million, or 18.6 percent of estimated 2017 expenditures. The following highlights were reported: Operations Committee Minutes Approved October 3, 2017 Page 3 of 3 Revenues are estimated to end the year at nearly $2.6 million or 2.7 percent higher than budgeted. Expenditures through July show all departments are remaining fairly close to budget with an overall favorable budget variance of $172,000 or 0.2 percent. 10. Director’s Report – Information Only. Mr. BeMiller updated members on the State Auditor’s Office (SAO) two-part finding regarding the Brownsfield grant, they are:  Timely payments of bills from vendors: a department within the city was not doing that as timely as should be. Finance will be working with that department to continue to improve in that area.  Federal funded programs: staff has to ensure vendors being used are not on the suspension and disbarment list. The documentation that was needed to prove that step had been taken could not be located. Overall, both the City and SAO feel this was a good collaborative process to complete the audit. The exit conference was Friday, September 22. 11. Non-Represented Salary Survey – Information Only. Human Resources (HR) Director Marty Fisher provided information of what’s been learned since the September 5, 2017 non-represented salary survey presentation. The Labor Classification and Compensation division of the HR department have reviewed all processes and calculations related to salary. Two key discrepancies were found that need to be corrected, they are:  Two additional non-represented classifications were found to be under market average: a parks superintendent going up one range and four HR managers going up one range.  Processes used for calculating target market averages for AFSME salaries included flat increases. The non-represented calculations did not include the 2018 cost-of-living projections (flat increases). Once the flat increases were taken out of the AFSME salaries and recalculated it was found that nine AFSME positions need a one-range increase to bring up to market level. 12. Adjournment. The meeting was adjourned at 4:50 p.m. by D. Ralph. J. Hays Jennifer Hays Operations Committee Secretary